Energizer Holdings (NYSE: ENR) reported Q2 EPS of $0.20, $0.04 worse than the analyst estimate of $0.24. Revenue for the quarter came in at $556 million versus the consensus estimate of $565.61 million.

"We accomplished a tremendous amount in the second quarter as we continue to position the company for the future," said Alan Hoskins, Chief Executive Officer. "This quarter marks a significant milestone in the transformation of Energizer into a diversified global household products leader. Our recent acquisitions add leading brands in growing categories we know well and provide new platforms from which we expect to drive significant shareholder value in the coming years using the same methods we have employed in our legacy business. Our legacy business also continues to build momentum and deliver top-line organic revenue growth and improved profitability. "

• Gross margin percentage on a reported basis, which was significantly impacted by the acquisitions, was 34.9% versus 45.0% in the prior year. Excluding the current year inventory step up resulting from purchase accounting and the current year acquisition and integration costs, gross margin was 40.6%, down 440 basis points from prior year, driven by the lower margin rate profile of the acquired businesses and unfavorable movement in foreign currencies. The legacy business was flat to prior year as currency headwinds were offset by the reclassification of currency gains from Other items, net into Cost of products sold, due to the adoption of new accounting guidance in the current fiscal quarter. (a)
• A&P was 4.4% of net sales, a decrease of 120 basis points versus the prior year. The legacy business had A&P of $21.2 million, or 5.7% of legacy net sales, an increase of 10 basis points, driven by increased media spending.
• SG&A, excluding acquisition and integration costs, was 20.2% of net sales, or $112.2 million, an increase of $24.5 million versus the prior year. The legacy business as a percent of net sales was 23.4%, or $86.9 million, flat with the prior year second quarter. The benefit of our continuous improvement initiatives as well as lapping prior year investments in those initiatives was offset by the licensing revenue reclassification to net sales. (a)
• Interest expense was $77.2 million compared to $16.5 million for the prior year comparative period. The current quarter expense included $33.2 million of interest expense related to issuance fees associated with the Battery and Auto Care Acquisitions\' debt issued in January 2019. Excluding the current year and prior year acquisition costs of $2.9 million, the current year interest expense increased $30.4 million attributed to higher debt associated with the acquisitions. (a)
• Income tax rate on a year to date basis was 46.9% as compared to 50.1% in the prior year. The current rate includes $1.5 million for the one-time impact of U.S. tax legislation passed in December 2017 and the impact of disallowed transaction costs resulting from the acquisitions, which drove a higher tax rate. The prior year rate includes $31.2 million for the one-time impact of the new U.S. tax legislation passed in December 2017 and the impact of tax withholding expense related to the cash movement that occurred to fund the Spectrum battery acquisition. Excluding the impact of our Non-GAAP adjustments, the year to date tax rate was 20.9% as compared to 24.0% in the prior year. The decrease in the rate is driven by the new 21% statutory U.S. rate effective for all of fiscal year 2019 compared to the statutory rate of 24.5% in fiscal year 2018. (a)
• Diluted net loss from continuing operations per common share for the quarter was a loss of $0.97 and Adjusted diluted net earnings from continuing operations per common share for the quarter was income of $0.20. (a)
• Net cash from operating activities from continuing operations on a year to date basis was $13.0 million and Adjusted free cash flow from continuing operations on a year to date basis was $101.1 million, or 9.0% of net sales. (a)
• Dividend payments in the quarter were approximately $21.0 million, or $0.30 per common share.
• Discontinued operations reported a loss of $11.0 million for the quarter, or $0.17 per common share. Included in these results are an after tax inventory step up adjustment of $8.8 million and costs related to selling the business of $4.5 million after tax.
• GUIDANCE:

Energizer Holdings sees FY2019 EPS of $2.90-$3.00, versus the consensus of $3.02. Energizer Holdings sees FY2019 revenue of $2.52-2.57 billion, versus the consensus of $2.21 billion.

Energizer Holdings sees FY2020 EPS of $3.25-$3.45, versus the consensus of $3.45. Energizer Holdings sees FY2020 revenue of $2.79-2.85 billion, versus the consensus of $2.8 billion.

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